Question:
Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
Correct Answer
$4480
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3200 × 10% × 4
= $3200 ×10/100 × 4
= 3200 × 10 × 4/100
= 32000 × 4/100
= 128000/100
= $1280
Thus, Simple Interest = $1280
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1280
= $4480
Thus, Amount to be paid = $4480 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3200
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 10% × 4)
= $3200 + ($3200 ×10/100 × 4)
= $3200 + (3200 × 10 × 4/100)
= $3200 + (32000 × 4/100)
= $3200 + (128000/100)
= $3200 + $1280 = $4480
Thus, Amount (A) to be paid = $4480 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3200, the simple interest in 1 year
= 10/100 × 3200
= 10 × 3200/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $320 × 4 = $1280
Thus, Simple Interest (SI) = $1280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1280
= $4480
Thus, Amount to be paid = $4480 Answer
Similar Questions
(1) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.
(2) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(3) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(4) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(6) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 8% simple interest?
(7) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(8) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(9) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.